Sports, community groups and other recipients of pokie funding are ‘pleading’ for Hamilton City Council Te Kaunihera o Kirikiriroa to leave pokies alone or put their future survival at risk.

These appeals are in response to Hamilton City Council proposing in its gambling policy review what we see as the ‘gold standard’ of policies governing pokie machines in pubs and clubs – a sinking lid with no relocations and no mergers.

A sinking lid means that no new licenses for pokie machines can be issued, and machines cannot be transferred to a new pub or owner if the venue closes. The Council has strengthened the policy by not allowing any relocations or club mergers under any circumstances. This is the best policy available to gradually reduce the number of pokie machines in pubs and clubs and the harm that accompanies them.

But community groups in Hamilton are concerned that the new policy will cause the funding that comes from these machines in the form of grants from pokie trusts or societies to ‘dry up’, leaving their future in jeopardy.

We believe there are some important points to clarify to more fully inform the debate:

Sinking lid policies do not result in immediate or drastic cuts in funding available for community groups – this is a misconception. Sinking lids are long-term strategies to balance the reduction of pokies, and pokie-related harm, with the need to provide funding to benefit the community. Sinking lids are policies of attrition: venues are not forced to close or remove their pokies – it simply means if a venue closes, pokies cannot go to another pub and no new pokie licenses can be issued. There are many councils around the country with sinking lid policies which have seen no reduction in the amount of funding available because they are designed for long-term effect.

Hamilton City lost nearly $38 million on pokie machines in pubs and clubs between January 2016 and August 2017. Over that same period, grants returned directly to the district totalled approximately $9.2 million.

As pokies are disproportionately situated in the most deprived areas of the community, the money lost on these machines, a proportion of which is used for community funding, is coming from those that can least afford it, often those with gambling or co-existing issues. Gambling harm in New Zealand is estimated to cause three times the damage of drug use disorders.

The benefits of community funding from pokies need to be weighed against the social and financial costs of gambling harm in the same district. Child neglect, poverty, family violence, fraud, poor mental health and loss of employment are all issues exacerbated by problem gambling and are hugely damaging to society. Gambling-associated crime stresses police resources, the justice system, social welfare and charitable organisations working to alleviate reoffending.

The financial return on money from pokies is poor. Across New Zealand in 2017, only 43.5% of the money lost on pokie machines was given back – after GST had been paid on the profits, taking the contribution of real money lost to under 38%.

Funding from pokie machines is not sustainable and there is now an unhealthy reliance on this type of funding. Many organisations are supported by funding from pokie machines, but this source of funding poses an important ethical question of whether New Zealand should support a system which determines that people in the same district are selectively benefited while others are being substantially harmed. ​

We acknowledge the good work that these community groups do and the worthwhile causes this money supports but we need to stop and consider where that money is coming from, not where it is going to. Councils are limited in what they can do to reduce gambling harm in their communities and a sinking lid with no relocations and mergers provides the best chance for a healthy future for everyone in Hamilton City.

PGF applaud Hamilton City Council for taking this stance and hope it stands firm on its ‘gold standard’ pokie policy.

“A funding model that relies on people losing money gambling, which taxes the poor through the concentration of gambling opportunities in their communities, and which lays waste to lives with the addictions it helps create, is no kind of model at all. Not for a moral society.” Professor Peter Adams, Deputy Head, School of Population Health; Associate Director, Centre for Addiction Research; University of Auckland.